updated 09:15 am EDT, Wed July 22, 2009

Apple $500M memory order

Apple has paid a large sum of cash to Toshiba in order to acquire flash memory, according to company executives. Speaking during Tuesday's Q3 conference call, COO Tim Cook and CFO Peter Oppenheimer acknowledged a $500 million prepayment to Toshiba, meant to secure a long-term supply of NAND flash for portable products. Cook notes that flash is instrumental to Apple, given its use in the iPhone and every iPod model except for the Classic.

Cook and Oppenheimer have not disclosed the length of the contract with Toshiba, and no deals with other memory suppliers have been completed. In 2005 however, Apple delivered $1.25 billion to Hynix, Intel, Micron, Samsung and Toshiba in a similar arrangement for NAND. Those deals are set to expire in 2010, and given Apple's disproportionate drain on flash supply, the company may need to sign further agreements.